Social Security payments average approximately $1,500 per month for the average retiree. This can vary depending on your lifetime income and, more significantly, when you choose to start receiving benefits.
Inflation has thrown a knot in the individual Americans’ Social Security benefits as well as how much they cover. In the last 12 months, prices have risen by a stunning 6% overall, reports GoBankingRates.com. To put that in context, consider the following: Inflation has been near zero for the greater part of a decade, yet prices have risen in almost every major category in less than a year. Grocery prices, especially, have risen by as much as 12% in some categories, a sector that has a significant impact on older adults living on fixed incomes.
Delayed Retirement Credits
The timing of your Social Security payout is one of the most significant aspects to consider. The earliest you can apply for Social Security benefits is at the age of 62, and the latest is at the age of 70. The sooner you begin receiving benefits, the less you will receive; the longer you wait, up to age 70, the more perks you will receive.
Depending on the amount of your monthly benefit and when you start taking distributions, you might practically double your monthly benefit. It’s because you can use delayed retirement credits if you wait.
According to AARP, delayed retirement credits are just a financial reward from Social Security for delaying your retirement benefit claim. The month you reach your retirement age, credits begin to accumulate.
The Social Security Administration boosts your eventual payout by about two-thirds of one percent for each month you delay filing for benefits from full retirement age until age 70, for a total of 8 percent per year you wait. This means that seniors who reach full retirement age at 67 but wait until 70 to file for benefits will see a 24 percent increase in their monthly payout.
The credits accumulate until you reach the age of 69, but they work in reverse if you decide to retire early.
“If a worker begins receiving benefits before his/her normal or full retirement age, the worker will receive a reduced benefit,” according to the SSA.